Question

Within the relevant range, variable costs can be expected to: Multiple Choice remain constant in total as the activity level changes. increase on a per unit basis as the activity level decreases. vary in total in direct proportion to changes in the activity level. increase on a per unit basis as the activity level increases.

Answer 1

Vary in total in direct proportion to changes in the activity level. As this cost increase or decrease, the output level.

What is the variable cost dependency?

Variable costs are proportional to output, resulting in a fixed sum per unit produced. It indicates that when more products are manufactured, variable costs will rise; conversely, if fewer products are manufactured, variable costs will fall.

Thus, option C is correct.

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